At Intrum Justitia, we depend on our people to deliver on our ambitious goals in challenging environments. The objective of our reward philosophy is to ensure that our employees are rewarded for valuable contributions to our Company.
Variable Salary and Incentive Programs
Presentation of Intrum Justitia's variable salary to company management and share-based incentive programs in accordance with 10.3 of the Swedish Code of Corporate Governance.
At Intrum Justitia, we depend on our people to deliver on our ambitious goals in challenging environments. The objective of our reward philosophy is to ensure that our employees are rewarded for valuable contributions to our Company. It also drives and promotes the behaviors and performance that best support our business strategy and ensures that we are able to attract the key talent we need to be successful.
Remuneration in Intrum Justitia should reflect individual competence, responsibility and performance, and it should be competitive in comparison to that of similar companies within similar industries in the relevant geography. To ensure that we drive the right behaviors and focus our efforts in the right areas, performance is measured against goals that are closely linked to our business strategy and our four core values.
The total remuneration is based upon four main components; base salary, short- and long-term incentive programs and pension. In addition hereto, other benefits, such as a company car, may be offered. The base salary depends on the complexity of work and the individual's performance and competence.
Short term incentive
Our short term incentive rewards the achievement of primarily financial business goals and drives short term performance, and hence it is set for one year at a time. The metrics are individually decided for each senior executive, in order to reflect the business strategy and our key focus areas. Financial metrics reflect business goals and enterprise value creation. In addition, the short term incentive allows for our total remuneration costs to vary based on both business and individual performance.
The short term incentive pays out a maximum amount corresponding to 20 to 50 percent of annual base salary. The cost for short-term incentive awarded to the CEO and members of the Group Management Team is estimated not to exceed MSEK 11 excluding social charges during 2016.
Our long term incentive aligns the interests and perspectives of our senior executives with those of our shareholders and creates a close commitment to the Company. It rewards long term value creation over a period of 3 years, and lets our senior executives share in the success of the business. As we believe it to be the best indicator of our Company’s long term success, we generally use growth in Earnings Per Share (EPS) as the measurement of value created. Similarly to the short term incentive, it also allows for our total remuneration costs to vary based on business performance.
The long term incentive can at maximum pay out an amount corresponding to 50 percent of annual base salary for the CEO and 20 to 50 percent for other senior executives.
To further promote ownership behaviour and commitment among our group management team, we have put in place shareholding guidelines that directly link the individual compensation of senior executives to the success of our business. The guideline means that each senior executive is asked to hold a percentage of their annual gross base salary in Intrum Justitia shares, 100 percent for the CEO and 50 percent for other senior executives. The shares are to be held for as long as the senior executives are employed in the Company and members of the Group Management Team.
2015 is the first year that the shareholding guidelines have been in effect, and each senior executive has been given an amount of time (to be individually agreed) to build up their shareholdings.
In case of termination of employment by Intrum Justitia, severance payments (if any) will not exceed 12 months’ base salary.
If unusual or special reasons are at hand in an individual case, the board reserves the possibility to deviate from these principles.
Evaluation of variable renumerations for 2015
In 2015 the Remuneration Committee performed a review of how executives at Intrum Justitia is rewarded. Here is the complete report; Evaluation of remuneration.pdf